provided by Sarah Ashton, Broker Associate
Ashton Kirchner Group, Keller Williams Realty
As we move through week 7 post Hurricane Ian, the virtual dust is settling some, but the physical dust is still swirling. Most property owners on the islands have made their way to their properties to assess the damage and make plans for the future. The fortunate ones found manageable clean up issues and have been able to get moving on making their properties their home again. The less fortunate ones have serious problems and are facing questions of repair, rebuild or, sadly, demolish. My heart goes out to all because regardless of your personal situation, it is difficult to see and navigate through this.
A sense of humor helps as does the prospect of being able to receive some financial relief. Insurance and FEMA have been on everyone’s speed dial of late but neither seem to really get to the heart of the financial loss created by this disaster. All of this, even the less major situations, are very expensive to address. So, imagine my surprise when my accountant suggested that there may be some financial relief from the I.R.S.
This link (https://www.irs.gov/pub/irs-pdf/f4684.pdf) takes you to an IRS form # 4684 – Casualties and Thefts. It allows the tax filer to record the casualty loss attributable to a Federally Declared Disaster. It appears pretty straight forward asking what monies were received from insurance, etcetera, what the Fair Market Value was of the property prior to the disaster and what the Fair Market Value is after the disaster. I have spoken with an appraiser familiar with Sanibel and it was suggested that the value prior to 9/28/22 would be fairly easy to assess from recent sales of properties. The value after 9/28/22 may take a little while as properties come on the market and are sold. This IRS provision even allows you to refile last year’s taxes to spread out the loss.
I am not an accountant, however I am a long time property owner and tax filer and this seems like a particularly beneficial provision. My view of the current state of property on the island, particularly on Sanibel is that there has been a minimum of a 25% loss of value on the minor damaged properties and 50% or more with those sustaining major damage. These loss dollars could be quite large and may benefit your tax situation for some time. Again – I am not an accountant and anyone interested in this possibility should consult with their own tax professional regarding their own situations.
Be safe and hug those you love. We will move forward and make our Island homes home again. Have a Happy Thanksgiving. I will be giving thanks to all my Island family and can’t wait to see you again soon.